Among the trouble spots, energy and materials sectors stood out. In 2015, metals and mining sector had the highest default rates at 6.5%, followed by oil and gas at 6.3%. As commodity prices continued to fall off, Fitch Ratings calculated that energy high-yield defaults jumped to a record 13%, surpassing the previous 9.7% high in 1999.

Fallen angel issuers tend to be larger and more established than many other junk bond issuers. Furthermore, since these fallen angels were formerly on the cusp of investment-grade status, this group of junk bonds typically has a higher average credit quality than many other speculative-grade debt-related funds. ANGL’s credit qualities include low investment-grade BBB 6.6%, along with speculative-grade BB 73.9%, B 9.8%, CCC 3.5%, CC 0.1% and non-rated 2.9%.

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The PowerShares Fundamental High Yield Corporate Bond ETF (NYSEArca: PHB), which tracks the RAFI Bonds US High Yield 1-10 Index, also focuses on slightly higher quality corporate debt securities than its major competitors.

The underlying Research Affiliates index implements a fundamental or smart-beta indexing methodology that screens for four factors, including gross sales, gross dividends, cash flow and book value of assets for each issuer. The end result is an index of company debt with higher credit ratings, including some low-investment-grade BBB 19%, along with speculative-grade BB 55% and B 26%.